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Working in a large firm as an Islamic finance tax advisor

Being an Islamic finance tax advisor requires expert tax knowledge. Knowledge of key other areas is also required, as well as good "soft skills." My article for "IFN Education."

Summary

My article for "IFN Education."

Islamic finance tax advisors need to be tax experts.

They also need to know about Shariah, accounting, company law and treasury management.

Good client service also requires strong soft skills such as listening and communicating clearly.

22 January 2016

The magazine "Islamic Finance News" has a supplement, "IFN Education." I was asked to supply an article for the January 2016 issue on what my job entailed and the skill requirements.

While the magazine is only available to subscribers, I have reproduced my own article below.

Working in a large firm as an Islamic finance tax advisor

This article takes a look at the roles an Islamic finance tax advisor takes on in a large firm, based on the experience of MOHAMMED AMIN, who prior to retirement was a tax partner in PwC, their UK head of Islamic finance, and a member of PwC’s four-person Global Islamic Finance Leadership Team.

What the position entails

All commercial transactions involve potential tax costs. Some tax costs are avoidable; some are not. The tax issues become even more complex when transactions cross international borders. The role involves advising, for example:

Islamic Bank clients structuring financings for their customers.

Corporate clients obtaining finance from Islamic banks. (One cannot act for the bank and its customer in the same transaction!)

Recommendations to governments on changing tax law to facilitate Islamic finance.

The skills required

The key requirement is expert knowledge of your country’s tax law governing domestic and cross-border transactions.

You also need to be familiar with the tax law applicable in relevant overseas countries. However, formally advising on foreign taxes is risky. Instead one needs to collaborate with overseas tax advisers; either within your own international network as with PwC, or with other overseas advisers.

Critically, expert knowledge of tax law is insufficient, by itself, to make a good tax adviser. One needs a great deal of additional knowledge to give meaningful advice to clients, even though in all of the fields mentioned below other advisers will give the final advice that the client relies upon. The reason the tax adviser requires this broader knowledge is that without it they will fail to understand the transaction properly or may end up proposing tax solutions which fail for non-tax reasons.

Some of the key additional areas where the tax adviser requires expert additional knowledge are:

The Shariah rules applicable to Islamic finance. While formal opinions will always be given by a Shariah scholar, a tax adviser who does not understand the Shariah rules governing Islamic finance will have difficulty giving good tax advice.

As well as the “hard” technical skills mentioned above, to practice as a senior tax adviser requires a number of “soft” skills. These include:

Effective time management with the ability to juggle multiple conflicting responsibilities while keeping all clients happy.

Delegation skills so that work can be carried out at the most appropriate level within the team led by the tax adviser while ensuring proper quality control.

Personnel management skills to keep the team motivated and cohesive in an environment of multiple client pressures that often require working extended hours, sometimes through the night.

Good listening skills so that you correctly absorb the information that the client briefs you with, taking into account the fact that many clients will lack the skills to properly convey their real requirements. The adviser needs to draw these out of the client.

Good oral and written communication skills. Clients often have only a sketchy awareness of tax law. The adviser must convert complex concepts into language that the client can understand, while avoiding the error of misleading the client by oversimplifying the issues.

Acquiring the skills required

Many of the “soft” skills mentioned above will be acquired through on-the-job experience. However most large firms, like PwC, invest significantly in providing formal “soft” skills training for their staff and partners.

How to acquire the “hard” technical skills mentioned above varies from country to country. This article sets out the UK position as an illustration for those resident elsewhere.

Many UK universities offer courses in tax law. However, these are academic and are not designed to equip their students for immediate professional practice upon graduation. Instead becoming a competent tax adviser requires an appropriate professional qualification. Obtaining this entails both passing examinations and demonstrating relevant practical experience.

The pre-eminent professional body in the UK in the field of taxation is the Chartered Institute of Taxation (CIOT). The author became an Associate in 1978 (by passing the examinations and demonstrating the experience) and a Fellow in 1999 by submitting a thesis. The CIOT has recently developed the Advanced Diploma in International Taxation as a specialised global tax qualification.

Several UK professional bodies offer qualifications teaching the Shariah rules governing Islamic finance. While the author often lectured for them, he considered that the qualifications concerned were “too junior” for him to take.

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